Shopify vs Amazon: Which Is the Better for Sellers?

"Which is better, Amazon or Shopify?"

"I'm considering moving from Shopify to Amazon..."

"I really need to get out of Amazon and into Shopify..."

"I want to expand my business onto Shopify..."

These are some of the things I've heard over at my Facebook group FBA Today. 27,000 members and it seems most of them are at least interested in Shopify. I'm in a unique situation where I've had experience with both Shopify and Amazon and it's time that we talk about the pros and cons of each. Also, I want to bust a few common misconceptions about your options.

The Big Misconceptions

Before we get into the pros and cons of Amazon and Shopify, let me clear up two common misconceptions.

MISCONCEPTION #1 YOU HAVE TO CHOOSE ONE OR THE OTHER

You do NOT have to pick Amazon OR Shopify. Yes, you should start on just one platform but expanding from one to both is not only ok, it's what I recommend.

It seems that most people view Amazon and Shopify as competitors and you need to commit to one or the other. That isn't the case at all. You can sell on Amazon AND have a Shopify store!

"You can sell on Amazon AND have a Shopify store"

MISCONCEPTION #2 SHOPIFY IS YOUR ONLY "OFF AMAZON" STOREFRONT OPTION

Shopify seems to be synonymous with "your own web-store." People assume it's either sell on a 3rd party platform like Amazon or eBay or sell on Shopify. Shopify isn't the only way to create your own web store, it's just the most popular 3rd party software for creating one.

Shopify is so popular for good reason. It really does rock. It's extremely feature rich, easy to customize and comes with world class customer support.

But, there are dozens of other options (WooCommerce, Clickfunnels, Etc) and in some rare cases, the best fit for you might be something other than Shopify.

Amazon Overview

Amazon has earned the right to go first. It is after all the platform that I got started on and helped me quit my job. I'll leave my personal bias out of this, I promise.

#1 Access to Their Massive Base of Loyal Customers

When you can say that a website "dwarfs" WalMart, you know it has to be massive. As of December 2017, Amazon sees an estimated 197,000,000 visitors per month. This means you could technically sell on the platform with no marketing at all.

If you practice arbitrage and sell other people's products, this method works BUT if you sell your own branded products, you'll benefit from paying Amazon for promotion or your product may never get seen.

Amazon buyers also love to use their Prime benefits. Who doesn't love free 2 day shipping?!? As an Amazon seller, you get to reap the benefits of the additional sales that Prime brings in.

Also, relative to other companies, most people trust buying from Amazon because of their aggressive money back guarantee policy.

#2 FBA (Fulfillment by Amazon) Program Helps Small Stores Scale without Warehouses or Employees

When you sell with Amazon's FBA program, you ship your products into their fulfillment centers and they are then shipped to customers when they are ordered.

This means less storage for you. You could theoretically have millions in inventory while you're couch surfing across the county. The need for a warehouse or a large amount of space is no longer an excuse.

There are fees of course for shipping to these fulfillment centers and storing your products there. Sellers have to closely manage these to ensure that they don't cut too deep their profits.

#3 Amazon Controls Your Business

Yes, you choose what you sell, how much you sell, what price you sell it at but Amazon has the final say in whether you are allowed to continue selling on their platform. Amazon is notorious for banning sellers. Many of them deserve it but I have seen first hand that some sellers are wrongly booted from the platform. They operate on a "guilty until proven innocent" model and don't care whether you are a brand new seller or a 10 year veteran who processes millions each year.

The parable about "building your house on sandy land," comes to mind here.

Also, Amazon competes with their sellers on listings. They want to offer the lowest price online on every product they sell (which of course, they cannot do 100% of the time) and will drop the listing price of products when they come in stock even if customers are paying much more for them.

Think of those hot toys during Christmas. If a product has an MSRP of $29.99 but Amazon went out of stock and people jacked up the price to $70+, Amazon will list the item at $29.99 when they come back in stock. Yes, even though the item would sell for more, they don't care.

Amazon also controls what products its sellers are allowed to list. They have many different brand and category restrictions. Many new sellers find it difficult to find products to sell at first because of this.

Buyers have access to Prime benefits

Leverage Amazon's credibility

Can require less marketing (variable)

FBA program allows for scale

Can require less customer service (variable)

Easy to set up and start making sales

Can sell "whatever makes money"

Can be kicked off forever

"High" fees

Brand and category restrictions

Uncertainty of change (Fees, etc)

Amazon "competes" with sellers

Shopify Overview

Ok, we've covered Amazon, let's move onto Shopify.

#1 Shopify Is "The Wild West" Compared to Amazon

Remember all those restrictions we talked about with Amazon? Shopify's doesn't have any of those.

Remember that fear of losing your entire business just because Amazon said so? That doesn't exist on Shopify.

#2 SHOPIFY Isn't the "Business in a Box" That Amazon Is

Now, neither Amazon nor Shopify are "get rich quick," businesses BUT you can typically start seeing returns from an Amazon business more quickly. Why? Because you can practice basic arbitrage and sell whatever makes money to Amazon's pre-existing audience.

You can start an Amazon business in a few hours but a Shopify store takes much more planning, advertising and general trial and error.

#3 Shopify Businesses Have Serious Resale Value

What happens if you decide you're bored with e-commerce and need money for other ventures? Well, if you have a Shopify store you can easily resell it for about 20x-36x months worth of net profits.

If your site is making $5,000/month, you could make a quick $100,,000+ payday by selling the entire business on a site like EmpireFlippers.com. You can resell an Amazon business as well but unless you have a unique line or products and connections with suppliers, it isn't worth nearly as much as a Shopify site making the same amount of profit.

Total control over business

Large suite of tools and apps

Fewer fees (variable)

Site design is very customizable

Fewer restrictions

Get your own traffic

Often requires ongoing ad spend

Requires skillful marketing

More complex to set up

Need to "niche down" (variable)

No brand and category restrictions

Key Takeaways

Start on one platform but consider expanding eventually into both Shopify AND Amazon.

Amazon is restrictive and they can suspend you without warning. You don't have those issues on Shopify.

About the author

Nate McCallister

Nate is the founder and main contributor of EntreResource.com. He is a lifestyle entrepreneur who spends his time building businesses and raising his two kids Sawyer and Brooks with his beautiful wife Emily. His main interests include copywriting, economics and piano.